Macau Casinos Lose to Lottery During World Cup: Chart of the DayBilly Chan
A lottery in China that incorporated World Cup betting lured wagers away from Macau casinos, underscoring increasing threats to the only Chinese territory where gambling is legal.
The CHART OF THE DAY tracks monthly sales of lottery tickets in mainland China, gaming revenue at Macau casinos and the Bloomberg Industry Macau (China) Gaming Market Index. The equities gauge comprising six companies has dropped since the end of February, when takings at resorts including Wynn Macau Ltd. and Sands China Ltd. climbed to an all-time high. By contrast, lotto sales reached a record 36.1 billion yuan ($5.8 billion) in June, or 1.7 times more than the casinos’ revenue, the widest ratio since 2009, data compiled by Bloomberg and China’s finance ministry show.
Restrictions on transit visas for Chinese tourists, the biggest drivers of revenue at Macau’s casinos, and a crackdown on the use of China UnionPay Co.’s debit cards this year have dragged down the growth of VIP gaming segment. The World Cup in June and July in Brazil further drew gamblers away from tables as people turned to bet on the global soccer tournament.
“There were enough incidents in the past months that could create that one-off discrepancy,” said Louise Cheung, an analyst at Nomura Holdings Inc. “Keeping an eye on lottery sales is important because it is a convenient gaming option with more platforms. The constraint is it depends on the events that people can bet on.”
The Chinese government started selling lottery tickets in the 1980s through authorized distributors as a way to finance social welfare projects, according to the Ministry of Civil Affairs. The sports lottery, which accounted for 43 percent of total ticket sales of 309 billion yuan in 2013, allows ticket buyers to bet on events including the World Cup, one of the few exceptions to prohibitions on gambling in the mainland.
Changes in Chinese visitors’ travel habits and a slowdown in the country’s economy are threatening the growth of Macau, Pansy Ho, co-chairman of MGM China Holdings Ltd., said earlier this month. Competition is also intensifying overseas as South Korea in March approved construction of its first foreign-owned casino resort and Japan considers opening up its gaming market. Macau leapfrogged the Las Vegas Strip to become the world’s largest gambling hub in 2006.